Financials Q4 Results Preview - Sustained Growth Momentum Across Asset Classes: ICICI Securities

ICICI Securities Report

Q4 FY24E is likely to be marked by sustained credit demand across products as affordable housing finance companies, small finance banks, non-banking financial companies-micro finance, micro small and medium enterprises are likely to deliver an average of 8% QoQ (ranging 5%-14%) AUM growth.

Growth for prime mortgage players (PNB Housing Finance Ltd. and LIC Housing Finance Ltd.) may remain muted at 4% QoQ; affordable housing companies may drive overall growth for HFCs.

While strong credit demand would support the top-line, yields pressure owing to competition remains a key challenge, with NIMs likely to further compress by 2-12 basis points QoQ for HFCs.

Credit cost for MFIs (including MFI-dominated SFBs) is likely to inch up given some states (Punjab, Haryana, Rajasthan) are witnessing collection challenges; however, back book repricing of MFI book would support NIM for MFIs in Q4 FY24E.

Going ahead, MFI yields are likely to remain under pressure as high MFI rates attract RBI’s attention.

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